Spot Gold Analysis. XAUUSD: $1836/1866 or $1777/1735 on US non-farm payrolls day?
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Analysis 04.11.2022 Accuracy Summary and Review
As projected in my analysis dated 04.11.2022: if the bullish momentum pushes Gold price across the $1685 barrier, $1717 and $1730 (1735 zone) can be the next target for Gold, opening the way to the $1777 zone. A rise above $1690 might result in $1717, $1735 and $1777, retracement (SELL) $1777-1735-1717-1685: XAUUSD price crashed till $1721 on 23.11.2022 while crashing from $1777 price zone. A buy and sell position at projected zones gave a good return in short and long term both the scenarios with net average profit strategy or $3 retracement / 23.6 RT on M5/M15.
Figure 1: Piyush Ratnu Spot Gold Analysis | The journey of XAUUSD from 04 Nov. 2022 to 02 Dec. 2022
Figure 2: Piyush Ratnu XAUUSD Analysis | As projected on 04.11.2022: if XAUUSD crosses 1690: 1717/1735/1777 next
November High: $1784 (15.11.2022)
November low: $1614 (03.11.2022)
Read August NFP Day Analysis dated 04.11.2022 here.
How to trade Spot Gold/XAUUSD on nonfarm payrolls day
Key Fundamental Points to be noted:
On Thursday, the US Dollar sell-off found extra legs after the Federal Reserve’s preferred inflation gauge, the Core PCE Price Index, declined to 5% YoY in October vs. September’s 5.2%, showing signs of inflation cooling and backing the recent dovish Federal Reserve pivot.
The US Dollar Index tumbled to its lowest in four months below the 105.00 level, as the downside momentum accelerated following a sharp sell-off in the USD/JPY pair on Thursday. The Japanese yen caught a fresh bid-wave and triggered a massive slump in USD/JPY after Bank of Japan (BoJ) board member Asahi Noguchi said that “depending on data, timing of exit from easy policy could be pushed forward.” His comments suggested that the Bank of Japan (BoJ) could be shifting gears toward a hawkish stance.
There remains a chance that the US economy can escape a recession as the Federal Reserve raises interest rates to lower inflation, but that window of opportunity for a “soft landing” has narrowed this year as price pressures have been slow to ease, Fed Chair Jerome Powell said on Wednesday, 30 November 2022. Chair Jerome Powell cemented expectations that the Federal Reserve will step down from its aggressive pace of tightening in December and presented a case for achieving lower inflation without tipping the economy into a deep recession. But Powell, in a speech and question-and-answer session Wednesday, offered guarded optimism that price pressures will slow, sending US stocks sharply higher as investors cheered the lack of a sharper-edged message from the Fed chief. His remarks, as officials prepare to enter their blackout period ahead of the Fed’s Dec. 13-14 meeting, hardened bets they will downshift to a 50 basis-point rate increase after delivering four straight 75 basis-point moves. As reported by Bloomberg.
Gold rallied for the third straight day, with strong acceleration seen on Thursday, after Fed chief Powell signalled that the central bank may start scaling back the pace of tightening as early as at next policy meeting in December, although Fed’s fight against inflation is far from over.
Near-term structure will depend on FED policy, WGC ETF report, ongoing geo-political tensions, Dollar strength, holiday season based volumes and China’s stand on COVID crisis management – re-opening.
Figure 3: Co-Relations
Figure 3: Reading Summary: XAUUSD co-relations | CMP $1800
Dollar Index crashed from 107.00 zone till 104.500 zone in last two days, US10YT crashed from 3.900 zone till 3.535 zone.
USDJPY crashed from 140.000 zone till 134.700 zone in last 4 days, Impact on XAUUSD price: a notable rise from $1735 zone till $1804 in last 4 days.
In current scenario, and as per past data fundamentals based co-relations have guided us in a more accurate manner than technical co-relations, however I prefer to compare and match both to stay updated.
How to trade Spot Gold XAUUSD on NFP data today?
XAUUSD Bearish Scenario: $1777/1735?
If the bearish momentum extends, gold price may fall further towards $1777/1735 zone (after 1769) with $1717/1680 as next stops, if Gold crash halts at $1735/1717 zone a reversal can be expected with a RT 23.6 on M5 and M15 30% RT before/in next 12 trading days.
XAUUSD Bullish Scenario: $1836/1866?
If the Bullish momentum pushes Gold price across $1812 barrier, $1818, $1836 and $1860 (1866 zone) can be the next target for Gold, opening way to $1888 zone.
Heading into the NFP show today, Spot Gold price is under a price trap of $1777 zone, as investors/traders are observing market closely after soft landing and inflation based rate hike statements by Mr. Powell, on the other hand hawkish stand by Japanses. The US NFP will emerge as one of the main market driver for gold price and FED rate forecasts scheduled to be announced on 02 December, 2022. Point to be noted: let us not forget the geo-political tensions which can trigger an upward price rally of more than $180-240 in Spot Gold price.
XAUUSD Technical analysis | Current market price $1800 | 02.12.2022
Gold Price – SR (D1) (MN) Levels to watch:
Spot Gold Price Projection and Trading Scenarios
Figure 4: Trading Scenarios : SR-D1 PR MTD FIB RT
Figure 4: Reading Summary: XAUUSD CMP $1800
A crash below $1769 might result in $1735/1717/1680 price stops before crashing till $1616;
A rise above $1812 might result in $1818/1836/1866/1888/1926.
Projected Trading Scenario
Observe price at US opening SS1 and then US SS2;
Observe D1SR: S2 zone and R2/R3 zone for reversals/retracement, Target NAP $3;
Do not enter between the pivot zone;
Observe: FIB 23.6% on M5 and M15 TF for NAP target price based exit in buy or sell entry after 30/60/90/120 minutes of NFP and $12/18/24/36 price movement sets
Long term: 12 (Short term)/20 (Long term) days for a A or V pattern formation;
Movement of $45/100 dollars on Gold price is not something unexpected nowadays, and a surprise on Monday during early trading hours cannot be ruled out too, so closing all positions today in net average profit is always the best trading strategy for every trader who wants to safeguard his principle.
I expect A pattern on H1 and H4 TF chart (from the rise/crash price at 17.30 hours observed today) in next 12 days (short term target) and 20 trading days (long term target). XAUUSD CMP $1800.
BUY/SELL STOPS | B/S LIMITS: TARGET Net 23.6 RT on M5/15 or NAP:
S1/S2 ZONE 1777 | DOWN TREND (Below 1769): 1755/1735/1717/1680 | BUY LIMITS;
R2/R3 ZONE 1836| UP TREND (Above 1812): 1818/1836/1866/1888 | SELL LIMITS.
Terms: TF: Time Frame | RT: Retracement | SR: Support Resistance | NAP: Net Average Profit
It is always wise to first PLAN THE TRADE, and then TRADE THE PLAN!
Hence, it is suggested to first observe the crash or rise with specific zones and levels in mind on the basis of various fundamental and technical parameters mentioned above, before entering a trade in a specific direction with a target of net average profit in a specific set of trades.
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Price chart of XAUUSD in real time mode
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